Asian shares slide after China Evergrande warns of cash woes

BANGKOK (AP) — Shares were mostly lower in Asia on Monday after troubled Chinese property developer Evergrande warned late Friday it may run out of money.

Investors also are struggling with uncertainty about the newest coronavirus variant and about when the Federal Reserve will cut off its support for markets.

“This is a week that will force uncomfortable contemplation about ‘known unknowns’ mainly associated with omicron, Fed tightening and China (regulatory/property) risks,” Mizuho Bank said in a commentary.

That will bring still more uncertainty after a tumultuous spell last week, it said.

Hong Kong dropped 1.8% and the Shanghai Composite index gave up early gains, losing 0.5%. Benchmarks in South Korea and Australia advanced but Tokyo's fell.

India's benchmark dropped 0.9% and Taiwan's also edged lower. Thai markets were closed for a public holiday.

Chinese regulators scrambled to reassure investors after Evergrande, one of China's biggest developers, said it may run out of money to “perform its financial obligations” as it struggles to comply with pressure to reduce its $310 billion in debt.

The worry is that unsustainable levels of debt in the property sector might trigger a financial crisis. China wants to avoid a bailout but also is unlikely to let the situation deteriorate to the point where problems would cascade to that level.

A number of real estate companies have run into trouble as the government has pushed to reduce debt levels, but officials have issued statements saying China’s financial system is strong and default rates are low. Most developers are financially healthy and Beijing will keep lending markets functioning, the most recent statements said.

Evergrande's shares plunged 9.8% early Monday, helping pull the Hang Seng in Hong Kong down to...